Terry Xiao Blog

If you are working and have an income, you are obliged to file your income tax returns every financial year. This is irrespective of whether you are residing in Florida, Texas, Wisconsin, or Ohio.

1. Due Dates

If you live in Ohio, you should know a number of things about tax law before you file your taxes. Reading about federal or state tax laws is mandatory. Most importantly, you should know the date on which your tax returns are due. You are required to pay your taxes by April 15. However, this could be shifted as per the tax law if it coincides with a weekend or a holiday. People who are unable to pay their taxes on April 15 may apply for a grace period of time. The second due date to pay your taxes is October 15.

2. Income Tax

In addition to knowing the due date to pay taxes, a resident of Ohio has to know about the income tax laws of that state. You should know how much percentage of your income goes as tax to the state. The tax percentages in Ohio are as follows:  Read more...

Often it is believed that simply purchasing an aircraft outside of California eliminates the sales and use tax liability.  There is a half truth here; properly purchasing an aircraft outside of California does eliminate the sales tax obligation, however, it does not eliminate the use tax. 

Many people do not know how, or where to begin when going through the California sales and use tax exemption process.  The simple answer is that you must take delivery of the aircraft outside of California.  However, there is more detail behind the simple answer.  For example, the contract of sale (purchase agreement) must specifically reference the location where the aircraft will be delivered to the purchaser outside the state.  

As standard practice, we advise that the delivery occur in Oregon.  Oregon is the closest, non-sales tax state in proximity to California that will not have a jurisdictional claim for sales or use taxes simply because the sale occurs there.  Therefore, Oregon is often times the most convenient location.  However, it may not be convenient in every situation.  There are a total of five non-sales tax states:  Oregon, Alaska, Montana, New Hampshire, and Delaware.  Many other states have guidelines for non-resident purchasers taking delivery within their state without fearing tax repercussions.  Be sure you know the rules.  Read more...

The article written last month titled “Proper Delivery Outside of California Begins the “Use Tax” Exemption Process” explained the importance of, and how to, properly take delivery of an aircraft outside the state, which is the first step in the California sales and use tax exemption process.  If you didn’t get a chance to read that article you can contact Aero-tax Compliance Experts, LLC (ACE) for a copy or visit www.aero-tax.com.

Many aircraft owners and potential owners have contacted us for an explanation on California’s “first functional use” requirement.   We have learned that there is a lot of mis-information and confusion on this issue.  Our attempt is to clarify some of the confusion that exists and eliminate the mis-information with the “first functional use” requirement for the California use tax exemption process.

“First functional use” is a critical component of the California use tax exemption process.  California Sales and Use Tax Regulation 1620 defines first functional use as “use for which the property was designed.”  An aircraft is defined in Law section 6274 as “any contrivance designed for powered navigation in the air except a rocket or missile.”  Logically, one would conclude that first functional use of an aircraft is flight because aircraft are designed to fly; right?  Not necessarily.  In my experience with the sales and use tax law, one can not rely upon logic.   Read more...

International taxation is a two way channel of extracting tax from the corporate houses based locally as well as globally. Under this scheme, the tax can be subjected to local agendas of individual countries along with offshore taxation all relating to extraterritorial income. As per government rule books, the “limitation” rules include all forms of territorial, residency or even exclusionary system. But, in the process of mitigating the harass tax laws most governments have built up a hybrid system that holds characteristics of two or more. Yet, you can’t assume things on international basis at this aspect. The laws of the land differ completely as per the owner of the individual land.

Thorough insight of International Taxation concept

Many times the corporate houses are subjected to double taxation concept- same income is taxed by different countries. And, at other times there is no taxation- where the corporate house has to pay tax to no country. It is not luck that plays role here. Instead, the individual corporate houses extract clauses from the rule book of the individual government itself and save tax from the prying eyes of jurisdiction in counteract! You are subjected to tax on local as well as worldwide income. At many times you get tax exemption or reduction or foreign credits, if you are paying taxes to other jurisdictions as well.  Read more...